Economists View the Fact That Florida Grows Oranges,Texas Pumps Oil,and

question 3

Multiple Choice

Economists view the fact that Florida grows oranges,Texas pumps oil,and California makes wine as

• A)confirmation of the virtues of free trade.
• B)confirmation of the infant-industry argument.
• C)confirmation that free trade agreements are not necessary.
• D)confirmation that specialization in absolute advantage works.

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Definitions:

Monopoly

A market structure characterized by a single seller, selling a unique product in the market.

Tacit Collusion

An informal and indirect form of collusion among competitors without explicit agreement, often through signaling and understanding of mutual interests.

Market Power

The ability of a firm or group of firms to manipulate the price of a good or service in the market by controlling supply, demand, or both.

Long-run Equilibrium

A state in which all factors of production are fully adjusted to the economic conditions, and all inputs and outputs are at their optimal levels without any external pressures.